Business Title Corp. v. United States

*713 Opinion

Here, as in the recent case of Business Title Corp. v. Division of Labor Law Enforcement (1976) 17 Cal.3d 878 [ 132 Cal.Rptr. 454 , 553 P.2d 614 ], we confront an appeal from a judgment in an action in interpleader brought by an escrow holder who, acting pursuant to an appointment under the provisions of section 24074 of the Business and Professions Code, 1 seeks to resolve conflicting claims to the proceeds from the sale of a liquor license. Also as in the former case, one of the parties claiming an interest in the proceeds is the United States of America (United States), seeking to enforce a federal tax lien arising out of an assessment against the seller of the liquor license. Here, however, it is the United States which appeals from an adverse judgment below. For reasons to be fully set forth we have concluded that certain crucial differences exist between the former Business Title case and that now before us, and that those differences require a result contrary to that urged by the United States. Accordingly, we affirm the judgment.

The facts are not in dispute. Hall-Thomas, Inc., entered into an agreement to sell its cocktail lounge business, including the…

I concur in the well-reasoned opinion of the court, and agree that these facts differ from those in Business Title Corp. v. Division of Labor Law Enforcement (1976) 17 Cal.3d 878 [ 132 Cal.Rptr. 454 , 553 P.2d 614 ].

If the circumstances had been identical we could have considered overruling Business Title Corp. I. The results of that ill-considered opinion have been tragic to working men and women, whose legitimate claims for wages accruing prior to the sale of a business must be subordinated to the demands of the federal government. (Id., at p. 889 (dis. opn. by Mosk, J.).)

Business Title Corp. I was a blow to employees and their right to be compensated for services rendered. The error of this court has now been compounded: believing itself bound by our ruling on the law, the Legislature in 1977 amended Business and Professions Code section 24074 so that hereafter in the list of priorities the claims of the federal government statutorily rank ahead of claims for unpaid wages of employees.

Although it is still my opinion that both legally and socially the priorities have been inverted, I must concede that rejection now of our earlier case would amount to little more than…